Solo funds, created by Travis Holoway, aims to connect borrows and lenders with interest free loans! Ideally, this is a great way for borrowers to get loans faster, and cheaper than a traditional bank or payday loans. It is also not tied to your credit score, so it may be easier for a person with bad credit to get a loan. A lender benefits from the quick payback time and making 10% returns which is much better returns than the bank or even many stocks.
Solo makes lending more social, like a Venmo for lenders. You can see SoLo users first name and initial with a profile photo and a SoLo Score. Your SoLo score is visible to all and affects your borrowing limit. By repaying loans on time you increase your SoLo score. If you do not repay a loan your score decreases and the loan goes to collections.
Solo for borrowers:
1.) Choose how much you would like to borrow.
2.) Describe why you are looking for a loan.
3.) Pick how much to tip the lender.
4.) Decide how soon you can pay your loan back.
5.) Choosing your donation amount:
5.) Confirm it.
Solo for lenders:
Lending with Solo is easy. By clicking on a loan request on the homepage you are brought to a screen that shows you the requested amount along with a breakdown of how much you would receive.
What is buyer protection?
Buyer protection means that even if a loan goes to collections, the lender gets the principal (the requested amount) back. Buyer Protection is NOT reimbursed by the lender, so it cuts into the lenders profits. If a loan with Buyer Protection goes to collections, then the lender does not get back the amount they paid for Buyer Protection or the SoLo donation. Not all loans are eligible for buyer protection.
I would recommend getting loans with buyer protection, although it does cut into your profits, it severely reduces the risk of a buyer not paying you back.
What if a borrower doesn’t pay you back?
If a loan isn’t paid back by the due date, then the lender has the option to “gift” the amount, or send it to Collections. Why someone would gift over $50 to a stranger who agreed to pay the money back I cannot fathom, but… it’s an option.
Sending a loan to collections hurts the borrower score and means that the borrower now has to pay a late fee (8%) on the loan. If the loan is repaid 8 days late or more, then SoLo collects a 30% recovery fee!
Is SoLo Funds trustworthy?
Solo Funds, the app, is mostly trustworthy, they do a good job of telling you the terms and conditions when you borrow or make a loan. They could be more clear about what happens to lenders when they do not pay back a loan. SoLo claims to try to get the borrower to pay, but the description is vague. I also wish there was more transparency in how the SoLo Score is created. But, Solo is trustworthy in that if you give someone a loan and they repay it with the tip, you will get the money in your account (as long as there are no technical issues, which I haven’t had).
The borrowers however, seem a lot less trustworthy. Some borrowers intentionally increase their Solo score to increase their maximum borrowing limit to then flake on a higher loan.
My experience with SoLo Funds
I have made 3 loans through Solo. One was paid back on time (thanks Jacqueline!) and two that I had to send to collections. One that went to collections was paid back over a year late! The second is still in collections, and has been for almost two years now. I lent out a total of $195 and recieved back… $136. That means I lost $59 by lending through Solo. Now, most of my net loss is from the $71.50 I am lost on a single loan that was never paid back in collections ($70 principal +$1.50 SoLo tip).
When I first began using SoLo “Buyer Protection” was not a feature. This addition makes SoLo much more attractive as it considerably lessens the risk to lenders. However, I’m not sure if the price of buyer protection makes SoLo worth it yet. Based on my experience, 2/3 of my loans went to collections! Let’s use the example of a $50 loan with a $5 tip that you purchase Buyer Protection on for $2.50. Even if you only lose $6 on the loan with buyer protection, you stand to gain only 5$ if the loan is paid back. If both options are equally likely, then you can expect to lose $1 per loan!
Is Solo Funds worth it?
I want to like this app, but it needs to have a way of making borrowers more accountable. Maybe things will change as the popularity rises, but for now, proceed with caution.
Categories: App Reviews